Paolo Mengozzi, Advocate General at the European Court of Justice (ECJ), has dismissed appeals by four German companies against decisions by the European Commission to refuse requests for more free allowances under the EU emissions trading system.
DK Recycling und Roheisen, Arctic Paper Mochenwangen, Raffinerie Heide and Romonta had each applied to the German authorities for free allowances on the basis of a clause laid down in the national implementing measures.
This permits free allocation of supplementary allowances to undertakings for which participation in the ETS would entail ‘undue hardship’.
However, the commission did not include the firms’ installations on the list of sites covered by Directive 2003/87 on the free allocation of allowances. The commission said assigning more free allowances would distort competition and undermine the harmonised approach to EU-wide allocations.
Mengozzi said the fundamental question was whether, in the light of the objectives of the ETS, the directive permitted the commission to provide for a hardship clause in implementing measures. He said it did not and rejected the appeals. As part of their appeals, the companies alleged that the EU’s law on free allocations also infringed their fundamental rights.
The advocate general dismissed this claim. ‘Established case-law shows that protection of the environment is one of the objectives of general interest which may justify limitations of fundamental rights,’ he said.
